Correlation Between Wuhan Xianglong and Shanghai Shuixing
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By analyzing existing cross correlation between Wuhan Xianglong Power and Shanghai Shuixing Home, you can compare the effects of market volatilities on Wuhan Xianglong and Shanghai Shuixing and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wuhan Xianglong with a short position of Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Xianglong and Shanghai Shuixing.
Diversification Opportunities for Wuhan Xianglong and Shanghai Shuixing
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Shanghai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Xianglong Power and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home and Wuhan Xianglong is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wuhan Xianglong Power are associated (or correlated) with Shanghai Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Wuhan Xianglong i.e., Wuhan Xianglong and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Wuhan Xianglong and Shanghai Shuixing
Assuming the 90 days trading horizon Wuhan Xianglong Power is expected to generate 1.4 times more return on investment than Shanghai Shuixing. However, Wuhan Xianglong is 1.4 times more volatile than Shanghai Shuixing Home. It trades about 0.09 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about 0.0 per unit of risk. If you would invest 798.00 in Wuhan Xianglong Power on September 3, 2024 and sell it today you would earn a total of 430.00 from holding Wuhan Xianglong Power or generate 53.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Xianglong Power vs. Shanghai Shuixing Home
Performance |
| Timeline |
| Wuhan Xianglong Power |
| Shanghai Shuixing Home |
Wuhan Xianglong and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Xianglong and Shanghai Shuixing
The main advantage of trading using opposite Wuhan Xianglong and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Xianglong position performs unexpectedly, Shanghai Shuixing can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shanghai Shuixing will offset losses from the drop in Shanghai Shuixing's long position.| Wuhan Xianglong vs. Cultural Investment Holdings | Wuhan Xianglong vs. Chengtun Mining Group | Wuhan Xianglong vs. Nuode Investment Co | Wuhan Xianglong vs. Metro Investment Development |
| Shanghai Shuixing vs. Cofoe Medical Technology | Shanghai Shuixing vs. Qingdao Baheal Medical | Shanghai Shuixing vs. Jinling Hotel Corp | Shanghai Shuixing vs. Allmed Medical Products |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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